June 11, 2005

Other: Hitch Your Wagon

General Motors has announced that is is going to be firing 25,000 of its workers in the United States by 2008.

Charlie Wilson has a lot to answer for.

Funnily enough, the head of Toyota has recently said that he was considering raising the price of their cars in America to head off a protectionist backlash that the American Auto Industry has been trying to foist on the government there, and wants other Japanese manufacturers to do the same. One reason, says GM, is that medical coverage costs for its employees is about $1500 per car. The number of active workers to retirees drawing a pension is at 2:5, too.

Make note: there are no layoffs announced for the Canadian plants. Wonder why? Here's two reasons to ponder:

1) The pension rate is reduced for Canadian employees, with the CPP easing GMs burden there;
2) The medical costs in Canada is about $500 per car, with the universal health plan making it much cheaper for GM as well.

Automotive subsidies, which Ontario reluctantly gave to several different manufacturers in 2004, and that Ottawa has seen fit to contribute to as well, have been one form of incentive. These aren't just giveaways, fortunately, as they do come with hooks. For instance, Ford has to maintain the amount of investment promised, or their sibsidy gets reduced. Likewise, they have to spend a certain amount on energy efficiency, enviromental technology and research and development.

Gee, how terribly touchy-feely, right? Wrong. The practical side is that hybrid cars are becoming more popular than ever, and alternative fuels are being considered around the world. If we can establish the knowledge in our work force now, not to mention $800 million manufacturing plants, we can encourage manufacturers to leave the investment (and jobs) here.

Two down sides: grants don't always work (see also: Hyundai, Quebec). For another, are we so sure we want to have even closer ties to American companies?

Norman Spinrad worte science fiction stories of a much diminished America, with a surging Africa dominating the world political and economic scene. Change that dominance to China and India, and the "fiction" fades a little. Don't get me wrong: I'm not some freakish reactionary crying "death to America" or any such silliness, and I don't weak black and forsee the coming of the end as we swirl into a marvellously bleak distopia. The United States has phenominal resources and a strong, educated population base.


The current government seems to have an active duty to weaken itself as much as possible, especially when its major corporations have interests that conflict with certain laws. The latest Estate Tax laws, the new Bankruptcy laws, the "Clean Skies" law, the proposed changes to social security and the slashing of the EPA and public health funding are all clear examples of this. In case it's not obvious, a government is the only tool available to the population that can counteract a corporation or business that is corrupt, negligent or deceptive. Corporations are not beholden to nations, nor do they have employees or consumers as a top priority. The only reason that corporations exist is to make money: if they didn't, they wouldn't exist, QED. They spot a better deal, they'll run, and that makes for a weaker country as resources are pulled out.

No need to mention the incredible debt they are racking up, almost half of which (43%) is being underwritten by the Bank of China. That's right: they're borrowing to pay off the interest on their debt. Anyone else see the problem with this? When the whirlpool goes faster, it gets deeper, too, and the shores of China, India and even the European Union are looking better all the time.


posted by Thursday at 10:35 pm


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